Financial Review

Summary Results

Financial highlights

Sales increased by 17 per cent to € 4 308 million.
Underlying operating profit from the luxury goods businesses, excluding non-recurring net disposal gains, increased by 47 per cent to € 713 million. Including non-recurring items, operating profit increased to € 741 million.
Underlying net profit attributable to unitholders, including the Group’s share of the results of British American Tobacco before non-recurring items, increased by 36 per cent to € 1 130 million. Including the significant impact of non-recurring items in both years, net profit attributable to unitholders declined to € 1094 million.

	March 2006			March 2006
	Underlying €m	Non-recurring items €m	IFRS €m	Underlying €m	Non-recurring items €m	IFRS €m
Sales	4 308	–	4 308	3 671	–	3 671
Operating profit	713	28	741	485	76	571

Net profit – parent and subsidiaries	586	22	608	338	76	414
Share of post-tax profit of associates	544	(58)	486	493	305	798
Net profit attributable to unitholders	1 130	(36)	1 094	831	381	1 212


Earnings per unit – diluted basis	€ 2 015	–	€ 1 951	€ 1 498	–	€ 2 195

Transition to IFRS

The results for the year ended March 2006 have been prepared under International Financial Reporting Standards (‘IFRS’). Accordingly, the comparative figures have been restated to conform with IFRS. A reconciliation of the March 2005 comparative figures under Swiss GAAP ARR as previously reported to the IFRS figures was published in October 2005 and is presented in note 36 of the Consolidated Financial Statements.

Sales and operating profit

Sales at the Group’s jewellery Maisons, Cartier and Van Cleef & Arpels, increased by 15 per cent and the specialist watchmaking division reported particularly strong growth of 22 per cent. Excluding non-recurring net disposal gains in both periods, underlying operating profit from the Group’s luxury goods businesses increased by 47 per cent to € 713 million. Gains on the disposal of Hackett and on the sale and leaseback of a retail property resulted in operating profit for the year increasing to € 741 million.

British American Tobacco (‘BAT’)

Excluding the impact of non-recurring items from both periods, the Group’s equity accounted share of the post-tax profit of BAT increased by 10 per cent to € 544 million. Including such non-recurring items reported by BAT in both periods – in particular the very significant gain made on the restructuring of its operations in the United States in the prior year – the Group’s share of BAT’s earnings fell by 39 per cent to € 486 million.

Net profit attributable to unitholders

Attributable net profit, including the results of Richemont’s luxury goods business and the Group’s share of the results of BAT, declined by 10 per cent to € 1 094 million. The positive underlying trend in both the luxury business and BAT’s results was offset by the nonrecurrence of the significant gains reflected in the prior year, largely linked to the interest in BAT. On an underlying basis, excluding the impact of non-recurring items from both periods, attributable profit increased by 36 per cent to € 1130 million.